Take the balance of each card and divide by the minimum payment. You get a number, your DOLP number. Line up the cards with the lowest DOLP number first. Pay as much as you can towards the card with the lowest DOLP number first. Then, take that payment and plus the minimum on the next card and pay it down...you know the snowball type principal. Dividing the outstanding balance DOES take the interest rate into consideration, but lining them up by lowest DOLP number also takes into consideration which you can pay off first.

Under the new minimum-payment rules, where most companies are going to 1% plus interest, it is basically interest-rate order. Under the old way, though, the way it was when the book was first published, most Visa and Mastercard issuers required 2 - 2.5% of the balance. So aside from special cases like store credit cards that might require higher payments, it doesn't really distinguish between the cards. If the debtor does have store cards or other short-term debts, this could free up some cash for later use, but under the old rules, what purpose did DOLP serve?

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